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Freddie Mac sues BofA, UBS, JPMorgan alleging Libor rigging

By Tom Schoenberg and Andrew Zajac, Bloomberg

March 20, 2013 • Reprints

Banks Named

Representatives of the banks who declined to comment on the lawsuit were Danielle Romero-Apsilos, a spokeswoman for New York-based Citigroup; Jennifer Zuccarelli, a spokeswoman for New York-based JPMorgan; Brandon Ashcraft, a Barclays spokesman; Bill Halldin, a Bank of America spokesman; Victoria Harmon, a spokeswoman for Credit Suisse; and Ed Canaday, a spokesman for Edinburgh-based Royal Bank of Scotland.

Eberhard Roll, a Portigon AG spokesman, didn’t respond to e-mail and phone messages requesting comment.

Calls to Bank of Tokyo-Mitsubishi UFJ Ltd. and Norinchukin Bank, both of Tokyo, which also were named in the complaint, weren’t answered on a public holiday.

“The BBA is aware of the lawsuit in the United States and is unable to comment,” Brian Mairs, a spokesman for British Bankers’ Association, said in an e-mail.

Brad German, a spokesman for McLean, Virginia-based Freddie Mac, said the company doesn’t comment on litigation. Denise Dunckel, a spokeswoman for the Federal Housing Finance Agency, the conservator of Freddie Mac, also declined to comment.

Freddie Mac and its sister company, Washington-based Fannie Mae, could have lost a combined $3 billion because of Libor manipulation, the auditor of the FHFA said in a Nov. 3 internal memo urging the regulator to investigate further.

Floating Rate

Freddie Mac and Fannie Mae use Libor to determine interest payments on their investments in floating-rate financial instruments such as bonds and swaps.

The two companies, which package mortgages into securities on which they guarantee payments of principal and interest, have been under U.S. conservatorship since 2008.

Barclays, UBS and RBS have been fined more than $2.5 billion following a global probe into Libor manipulation. Traders rigged the benchmark to profit from bets on derivatives, while banks sought to submit artificially low rates to appear financially healthier than they were, according to regulators.

From August 2007 and through at least May 2010, the defendants “formed a combination, conspiracy, or agreement,” to submit false Libor rates, Freddie Mac alleged in the complaint.

The case is Federal Home Loan Mortgage Corp. v. Bank of America Corp., 13-cv-00342, U.S. District Court, Eastern District of Virginia (Alexandria).

Bloomberg News

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Related Terms
JPMorgan Chase & Co. 818Citigroup Inc. 603Bank of America Corp. 596Barclays Plc 573Bank of Canada 490UBS AG 455Deutsche Bank AG 426Virginia 354Regulation 344Freddie Mac 332Credit Suisse Group AG 308Washington 224Fannie Mae 206Royal Bank of Scotland Group Plc 206U.S. District Court 202JPMorgan 176financial products 134Manipulation 133Libor 104Royal Bank of Canada 87UBS 77Bank of Tokyo-Mitsubishi UFJ 69Federal Housing Finance Agency 51Thomson Reuters Corp. 41Lawsuit 36Jennifer Zuccarelli 19Freddie Mac 13BofA 13Danielle Romero-Apsilos 11antitrust law 7industry lobby 4Bill Halldin 3Brian Mairs 3Norinchukin Bank 2dozen other banks 2Brandon Ashcraft 2Ed Canaday 2Brad German 2British Bankers 1Portigon AG 1Federal Home Loan Mortgage Corp. 1Denise Dunckel 1Victoria Harmon 1Eberhard Roll 1Richard Leveridge 1

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